My thoughts on electricity policy in 2020


New Zealand faces numerous environmental and economic challenges going forwards into the 2020’s and beyond. One those challenges is ensuring we have an adequate energy supply without being environmentally irresponsible. This article outlines my thoughts on electricity policy in 2020.

I will start with the most obvious one. Hydroelectric power. Most New Zealanders can probably name at least one hydroelectric power station in this country. I have added a significantly longer, but not complete list below:

  • Waikato River: Aratiatia, Atiamuri, Whakamaru, Waipapa, Maraetai, Ohakuri, Arapuni and Karapiro; Tongariro Power Scheme: Rangipo and Tokaanu
  • Upper Waitaki: Tekapo A and B, Ohau A, B and C, Benmore, Aviemore and Waitaki
  • Clutha River: Clyde and Roxburgh

The contribution of hydroelectric power is substantial with the power stations listed supplying about 3,400 megawatts of electricity and the total contribution being about 60% of our total generating capacity. Whilst there are calls to dam more rivers to supply clean energy, they come at great ecological cost to the rivers and not all of them are suitable for damming even if we did want to.

One possibility is that the out put of Manapouri power station, the largest hydroelectric power station in the country would be diverted to the national grid. This poses challenges as well as opportunities. In terms of challenges, could New Zealand’s grid take another 850 megawatts of electricity and if so, what would it mean for the market – the shares of shareholders in electricity companies would significantly weaken. A flip side would be the ability of thousands of New Zealanders who struggle with electricity bills each year to be able to pay them and stay warm.

Whilst I support the development of renewable energy sources, I am not so keen on the N.I.M.B.Y’ist politics that often go with such developments. The same people who talk about the need for green energy are often ones who grumble about a wind turbine when they see mangled birds on the ground or realize that these things are not altogether quiet. Would they rather another dam was built, thus depriving us of further unspoilt river?

Unlike others, I support the exploration of Waste-to-Energy as a potential source of energy. This is not to say I encourage the continuation of the waste stream just to power a W-t-E facility, but, I believe waste material that cannot be easily recycled should be sent to a W-t-E facility. In terms of where to locate such facilities, I believe the West Coast of the South Island is a good place to start. Whilst the West Coast has numerous rivers that the energy lobby would be interested in damming, there are several good reasons why we should not:

  1. Too many rivers are dammed or have been diverted in New Zealand for electricity generation already;
  2. The West Coast is seismically volatile and a major earthquake of up to magnitude 8 is likely in the working life of any dam built – it would have to be more robustly constructed than might be worth the cost
  3. The best candidates have unique natural characteristics that would be lost along with tourism operations that have been built up along side them

But there are two types of energy that I accept have no future. One is coal fired power. Coal is a sunset industry whose only hope of survival is to power a standby power station that is used when hydro-electric storage lakes are low due to dry conditions. Huntly power station which has four coal/gas units each capable of generating 250 megawatts has started replacing them, with its owner Genesis intending to completely remove coal by 2030.

The other is nuclear power. I have described in other other articles why there is no place for nuclear power in New Zealand, and why establishing such a power station would be prohibitively expensive and resource intensive.

There are other things New Zealand could be doing, which to the best of my knowledge it is not seriously considering. The first is solar energy. There are significant challenges facing solar energy, which include that the panels require rare earth minerals that are sourced from politically unstable parts of the world. The financial return from solar projects also raises questions about the viability of such a power source. Nonetheless that has not stopped a small scheme being established in south Auckland for industrial purposes.

The second we have actually given much political consideration to, for reasons of reducing the cost to householders to stay warm. However little practical thought as to HOW we do it – even though the answers are glaringly obvious – has been given. I am talking about the massive scale insulation of every state house in New Zealand and setting requirements for new houses. Politicians on the right will decry the regulations as red tape whilst politicians on the left will decry the social costs. Yet neither seem interested in a compromise. How, when – if at all – this ever takes place is anyone’s guess.